LABOR MOBILITY AND SPATIAL DENSITY

Martin Andersson and Per Thulin ()

No 248, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This paper focuses on a much cited but seldom measured micro-foundation for agglomerations: inter-firm labor mobility. Labor mobility has been advanced as a vehicle for knowledge flows and labor market efficiency, and is often maintained to be an important source of agglomeration economies. Based on matched employer-employee data, we estimate the influence that spatial employment density has on the probability of inter-firm job-switching, while controlling for ample attributes of each worker and employer. The rate of inter-firm labor mobility varies substantially across regions and we document a systematic and robust positive influence of density on the probability of job switching. The likelihood that such switching is intra-regional is significantly higher if the employees operate in denser regions, verifying that labor mobility (and thus the effects mediated by it) is indeed localized. Higher rates of inter-firm labor mobility appear as a likely mechanism behind the empirically verified productivity advantage of dense regions.

Keywords: job-switching; inter-firm labor mobility; agglomeration economies; external economies; micro-foundations; density (search for similar items in EconPapers)
JEL-codes: J61 J62 R11 R12 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011-04-26
New Economics Papers: this item is included in nep-eff, nep-geo, nep-hme, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0248

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